rainforest action network study:

banks pump billions into deforestation-linked firms in Southeast Asia

rainforest action network study:

Malaysian's Malayan banking is the top financier of forest-risk sectors in Southeast Asia

Malaysian's Malayan banking is the top financier of forest-risk sectors in Southeast Asia

Malaysia’s Malayan Banking is the top financier of forest-risk sectors in Southeast Asia, according to the database, which details around $2.71 billion awarded to palm oil companies, including Felda Global Ventures and Salim Ivomas Pratama. Last year, a Wall Street Journal investigation exposed serious human rights abuses in Felda’s plantations, including human trafficking, forced labor, and withholding of wages, while the Salim Group has been linked to rainforest clearance and violations of community and worker rights. The new database includes an assessment of banks’ social and environmental policies, in which Malayan Banking fails to rank under criteria including whether operations in primary forests are prohibited, and whether the banks are signatories to the main international covenants related to forest and land issues.

Malayan Banking did not respond to requests for comment. It is not alone in providing big money to forest-risk sector companies, while seemingly lacking adequate safeguards.

A new study found that commercial banks have financed companies responsible for rainforest destruction in Southeast Asia to the tune of billions of dollars, and called on lenders to stop "fueling forest crime". At least $38 billion worth of commercial loans and underwriting facilities were provided to 50 companies in these sectors between 2010 and 2015, for their production or processing operations. Southeast Asia is home to some of the world's most diverse rainforests, but they have come under threat in recent years due to large-scale expansion in industries such as palm oil, pulp and paper, rubber and timber.

The figures were derived from a new research tool aimed at examining how firms linked to deforestation are financed. It was developed by the California-based Rainforest Action Network (RAN), Indonesia-based community group Tuk Indonesia and Dutch consultancy Profundo. "This research suggests that banks continue to turn a blind eye to the devastating impacts of their financial services," RAN forest and finance campaign director Tom Picken said. "Only tightened financial sector regulation is capable of setting the kind of binding standards needed to stop banks fueling forest crime," he added. The groups hoped the tool would highlight the impact of such lending and financing on forests and local communities, and the industry could impose mandatory requirements on banks and investors to conduct due diligence before credit approval.

"The devastating forest and land fires of 2015 and new fires in 2016 can be seen as one such impact, but so far none of the financiers have been held responsible for their role in enabling plantation expansion," Rahmawati Retno Winarni, executive director at Tuk Indonesia said.